Smokers pay €12,000 less in life assurance cover than in 2000

SMOKERS can now pay up to €12,000 less over the course of their life assurance cover than they could have done 10 years ago.

Caledonian Life said that over the last decade, life assurance premiums have dropped significantly due to medical advances and lifestyle improvements which lead to an increased life expectancy.

Women have fared well in terms of pricing over the years due to their increased life expectancy, with figures showing a female’s life assurance premium can be around 25% less than their male counterpart.

The greatest percentage in premium falls occurs for young women in their 20s looking for cover up to the age of 60, where some premiums have fallen by over 50%.

The average drop in premiums was 24%, which would be even greater if inflation was allowed for, according to Caledonian Life.

In a typical family situation, with a 40-year-old taking out €300,000 life cover until they are aged 65, a male non-smoker’s premium is down 40% from €66 to €40 per month over the past 10 years, a saving of €7,800 in the full term of the policy.

Male smokers save even more over this period, with some premiums down from €125 to €85, equating to a saving of €12,000.

The corresponding drop for a non-smoking female is €46 to €30 per month; a female smoker’s premiums reduce from €91 to €61 per month.

Meanwhile, Daragh Feely of Caledonian Life said there is a growing need for life cover in Ireland.

“Nearly 70% of our population is under 44 years of age. Given that we estimate the prime age at which people need the highest amount of life assurance as being anywhere between 35 to 45, then we can see that Ireland’s population statistics herald a growing need for protection policies.

“The logic behind this is clear. A couple in their 30s with a young family have greater expenses and dependencies over a longer period of time and, therefore, a more pressing need for sufficient life cover than a couple approaching retirement with adult children who are no longer dependent upon them,” said Mr Feely.

Caledonian Life also contend that a previous birth peak in the early 1980s has led to much of our population now reaching prime child-bearing age and is contributing to a “very significant” increase in recent births.

“For example, in 2000, there were some 57,800 births, but, in 2008, the figure had increased to 75,000.

“Having a family is a wonderful thing but there’s no doubt it’s also expensive. While it’s always a good thing to have any life cover in place, you should check regularly to see if it’s still adequate to meet your needs,” Mr Feely said.